It is, therefore, important to carry out all the necessary verification checks that would enable you to determine whether that business is legitimate before you decide to go into partnership with them, use them as a supplier, or offer them a loan. Not only does this protect your company from dealing with dishonest people, but it also gives you a better understanding of how other businesses operate.

Continue reading as we outline the steps you should take to check whether a UK company is legitimate.

Basic checks

If a business is to be trusted, then there are several basic first checks that you can carry out to verify this. Whilst these facts alone will not be able to provide you with a conclusive answer, they can help in raising suspicions and exercising caution, particularly if something seems out of line.

First of all, you can determine whether the address they have provided is correct and accurate. If the business is a local one, do not hesitate to drive to the premises and confirm whether a company is located there. Is there a sign outside indicating it is the company's premises? Is the location in a business park, office space or commercial building?

Of course, not all businesses operate out of traditional brick-and-mortar buildings or corporate offices, but if something does not feel quite right, be sure to question it.

In terms of the phone number provided, this should, ideally, be a landline. However, for very small businesses and start-ups, it is not unusual to list a mobile number, so this may not be an immediate red flag. The best course of action is to call the number and check that an employee answers and gives a professional greeting, with the name of the company mentioned.

Next, it is important to check the businesses' website and social media presence. In the modern world, most genuine companies will have a website and at least one social media profile set up, in order to showcase their brand, connect with customers and increase sales. As such, if you cannot find a company on any of the major social platforms, or if they do not have their own website, then this something to be wary of.

Online reviews and customer testimonials are also useful in gauging the level of satisfaction and experiences people have with the company. Google My Business, social media reviews and forums are all sensible places to look, as well as any industry-specific platforms.

Whilst having a couple of negative reviews should not completely dissuade you from dealing with them, if you do happen to notice a trend or if something seems off, make a note of it. Similarly, if website testimonials or reviews seem forced, it could be an indication that they are not genuine.

Official checks

In the UK, it is a legal requirement for companies to register with certain agencies or organisations. As such, carrying out several official checks is strongly advised.

If the company in question is a limited company, they must be listed on Companies House. The information on here is publically available, which means you can easily access some important pieces of information, including their registered address, filing history, accounts and director information.

Since directors are key people within an organisation - often responsible for top-level decisions - the information available about them can offer you valuable insight into a company's structure, operations and, ultimately, whether they will be a credible business partner.

Performing a director search shows you the individuals' appointment history and previous positions. This can provide you with an indication of their fitness for the role. For instance, if the director in question has held similar positions at companies that have gone into liquidation or have dissolved, you might wish to exercise caution.

Whenever dealing with a company for the first time, you should carry out business credit checks, which allow you to establish how good they are at handling their financial responsibilities. By revealing some useful information, including a credit rating, this check helps you decide whether you want to go into partnership with that company, or if they'll be a good candidate for a loan.

If the company offers financial services or products, they should be listed on the Financial Conduct Authority's (FCA) Financial Services Register. This database publically lists all businesses, bodies and individuals that have been regulated by the FCA. If you cannot find them after performing a website search, it is strongly recommended to avoid dealing with them.

Use your judgement

This checklist is not exhaustive - it is always best to trust your own judgement and exercise due diligence before you decide whether to deal with any company for the first time.

At the end of the day, you should feel completely comfortable before entering into any business arrangement, which is why taking the time to carry out sufficient research and perform the relevant checks is vital in helping you to establish the legitimacy of any individual or company.